Definitions and Explanation
To understand exactly what is meant by "free coinage of silver", it is necessary to understand the way mints operated in the days of the gold standard. Essentially, a prospector or other owner of uncoined gold could bring it to one of the United States mints and trade it for its equivalent in gold coins, less a small deduction for seignorage. Free-silver advocates wanted the mints to accept silver on the same principle, so that anyone would be able to deposit silver bullion at a mint and in return receive nearly its weight in silver dollars and other currency.
Through most of the years when silver dollars and smaller denominations were minted in actual silver, the melt value of the silver was substantially less than their face value. As a result, their monetary value was based on government fiat rather than on the commodity value of their contents, and this became especially true following the huge silver strikes in the West, which further depressed the silver price. From that time until the early 1960s the silver in United States dimes, quarters, halves, and silver dollars was worth only a fraction of their face values.
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